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Tag: Bintang

  • Multi Bintang Cancels Factory Expansion

    Multi Bintang Cancels Factory Expansion

    PT Multi Bintang Indonesia (MLBI) has decided to postpone plans to expand its factory in Mojokerto. The decision was made as the company faced difficulties with Trade Minister Regulation on the distribution of alcoholic beverages and the Draft Bill on alcoholic beverages, which is still being discussed by the House of Representatives.

    Bambang Britono, Director of Corporate Relationship of the company said that the Trade Minister Regulation No. 6/M-DAG/PER/1/2015 on the Control and Supervision on Procurement, Distribution and License for Alcoholic Beverages have forced the company to reschedule its plant to expand production facilities.

    “It is actually depends on time and supply. Previously [our sales] had dropped because of the Trade Minister Regulation. So we have decided to do a reschedule,” Bambang said on Friday, September 23, 2016.

    In addition, the government’s plan to pass the Draft Bill on Alcoholic Beverages, which bans the production, distribution and consumption of alcoholic beverages with an alcohol level of one up to 55 percent have disrupted the company’s distribution activities. Nevertheless, Bambang is certain that the government will be able to come up with a just policy for alcoholic beverages company.

    “Because the [alcoholic beverages] industry has quite large [contribution], not only in terms of levy and taxes revenue, but also multiplier effect on other industries, such as tourism. So the government will consider its own discretion,” Bambang said.

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  • Bintang Profits Take a Hit on Beer Ban

    Bintang Profits Take a Hit on Beer Ban

    One of Indonesia’s biggest beer producers, PT Multi Bintang Indonesia, reported a plunge in profits of 42% in the first quarter of the year, when convenience stores started phasing out stock in preparation for a ban on alcohol sales.

    Net income was down to $8.2 billion (107 billion rupiah) year-on-year in the first three months of the year, the company said in its latest financial report.  It also said it was putting on hold planned investments of around 635 billion rupiah due to the ban and continued uncertainty over the future of the regulation.

    The ban is part of decree from the Ministry of Trade that prevents convenience stores from selling beverages with an alcohol content of more than 1%. It took effect on April 16, but retailers were told to start phasing out stock in January.

    While beer sales are still allowed in supermarkets and restaurants, beer distributors feared that sales would take a hit since small retailers and convenience shops account for around 60% of all beer sales in the country.

    “These traditional wholesalers are an important distribution channel in the route-to-market for most consumer goods in Indonesia, including beer,” Multi Bintang said in a statement.

    Retailers and analysts have also been critical of the ban, saying it was pushed too quickly without allowing the industry time to prepare.

    “This is the ready-fire-aim policy making where nobody thinks through the implications,” said Paul Rowland, a Jakarta-based political analyst. “We’ve had a string of these kind of policy decisions that don’t take into account the end result,” he added, pointing to a proposed ban on second-hand clothing and the cancellation of thousands of import licenses in December.

    Multi Bintang’s President Director Michael Chin said that the decline in profit and revenue, which fell by 23% from the same period last year, “was primarily due to the destocking.” The company is currently in talks with the Ministry of Trade about the ban but says they’re moving slowly.

    In an interview last month, he told The Wall Street Journal that concerns about legal uncertainties raised by the decree would likely derail tens of millions of dollars allocated to boosting the company’s production. Muslim-majority Indonesia makes up a small percentage of total global beer sales for major beer makers, such as Heineken and Guinness, but its growing middle class has made the world’s fourth most populous country an enticing market for expansion.

    Multi Bintang, which is majority-owned by Heineken Holding NV of the Netherlands, also produces Heineken in Indonesia and Guinness through a third-party agreement. It has been in Indonesia since 1929.

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  • Heineken in talks with Indonesia on beer ban, underage drinking

    Heineken in talks with Indonesia on beer ban, underage drinking

    Brewing companies and Indonesia’s Trade Ministry will form a joint working group to discuss alternative solutions and programs to prevent underage drinking, Dutch brewer Heineken says.

    Heineken, the largest shareholder in Multi Bintang Indonesia, met with Trade Minister Rachmat Gobel on Sunday just days after the government banned alcohol sales at convenience stores and small shops across the country.

    In a press release obtained by GlobeAsia, Heineken said that the company applies very strict rules about how to market and sell its beer products that include prevention of underage drinking. It also said that Multi Bintang has worked with a large number of minimart operators to train their staff to make sure they do not sell to people below the legal drinking age of 21 years old.